Wednesday, February 3, 2010

Parkson Holdings subsidiary, Serbadagang Holdings SB, has received a court action to proceed with its proposed acquisition of a 43.31% stake in Qingdao No 1 Parkson Co Ltd (Qingdao Parkson) from China Qingdao No 1 Store (China Qingdao) for 185m yuan cash (RM92.5m). The acquisition would enable the group to tap into a larger share of the earnings of the Qingdao Parkson in which the group’s shareholding would be raised from 52.6% to 95.91%. The acquisition was expected to be completed by the first quarter of 2010.

Comment: The acquisition of Qingdao stores will allow Parkson Holdings to inject the stores into Parkson Retail Group (PRG). We expect Qingdao stores to be injected into PRG after the injection of Shantou and Shenyang stores. No change in our estimates as we have factored in a 95.9% stake contribution from the Qingdao stores. Maintain BUY at a TP of RM7.06.

The home-grown OldTown restaurant chain, renowned for popularizing the nostalgia of the good old days of kopitiam in an urban setting, is going for listing. OldTown, which owns and operates the OldTown White Coffee brand and cafe outlets, plans to issue 59.5m new shares of RM1 each and offer for sale 30m shares under its proposed IPO pursuant to its listing on the Main Market of Bursa Malaysia. According to its draft prospectus on the Securities Commission website, the group is offering 10m of the new shares, representing 3.3% of its enlarged paid-up capital for application by the general public and 5m shares to directors and employees. Old Town plans to use the IPO proceeds to acquire other companies (32% of proceeds), 40% for capital expenditure, 15% for working capita, 7% for repayment of bank borrowings and the balance for listing expenses. OldTown also aims to expand its café outlets locally and in Singapore. (Financial Daily)